Cryptocurrency Miners Are Selling Off GPUs For Cheaper

A photo of a graphics card.

Photo: Joby Sessions / PC Gamer Magazine/ Future (Getty Images)

The crypto market is continuing to fall, which has led a ton of miners to exit the market or to downscale their operations, thus finding themselves in possession of valuable computer components that they now no longer need. Some such miners, many from China and South Asia (where electricity is cheaper), are now taking that hardware and dumping it on e-commerce websites. As a result, GPUs that usually go for $500 to $600 are selling for around half that price on the secondhand market.

As noted by PC Gamer, GPUs are suddenly flooding the market, a trend likely driven by several factors. The major one is how cryptocurrency prices have been plummeting since this winter. Now that it seems like the market won’t make a turnaround anytime soon, miners are jumping ship. And these aren’t pristine, out-of-the-box GeForce RTX 3060s that they’re selling. These graphics cards have been used to mine crypto, which uses tons of electricity. Buyers have found that these RTX 3060s were cheap for a reason—many of them are defective after prolonged use. So the common wisdom seems to be that you shouldn’t be too eager to score some used GPUs from an unknown buyer.

However, there’s been some contention in the tech community about how degraded these graphics cards really are. PC World claims that buying a used graphics card from an experienced miner beats buying one from a gamer (who tends to “overclock” their GPUs). Tech YouTuber Linus Sebastian tested some mining GPUs on camera and found that the used graphics cards can still perform well—if they were carefully maintained by their previous owner. So if you must buy a GPU from a miner who wasted a ton of electricity on speculative currency, then you should at least find a reputable seller. Good luck with that, by the way.

If you ask me, I think it’s funnier to let miners languish with a bunch of expensive graphics cards that they can’t even get rid of. It is annoying, though, that Nvidia benefited hugely from the crypto boom, so much so, in fact, that the company got hit by a federal fine for trying to hide how crypto boosted its profits. Hey, at least this crypto nightmare is finally over *knocks on wood* and we’ll all no doubt be seeing far more reasonable graphics card prices very, very soon.

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Niagara Falls’ ties to cryptocurrency mining

A single Bitcoin is valued at over $41,000 — but it takes thousands of computers and tons of energy to competitively mine the cryptocurrency.

The U.S. is the world leader in Bitcoin mining — followed by Kazakhstan, Russia, Canada and Ireland. The industry leader used to be China, until the country’s government banned decentralized currencies last year.

The profit margins to mine cryptocurrencies can be tight after factoring the costs for all the hardware, electricity and setup.

That’s why many companies have flocked to areas with cheap coal or fossil fuel-based energy — leading to widespread criticism that the industry is polluting the planet and cashing in on climate change.

It takes about 2,000-kilowatt hours to calculate a single Bitcoin transaction. That’s the same amount of electricity the average U.S. household uses over the course of two months. And if you combine all crypto mining worldwide, it consumes more energy than the entire country of Norway.

The foreign currency exchange site forexsuggest.com estimates miners will generate 57 million tons of CO2 emissions this year due to the electricity needed to mine Bitcoin.

However, a move is underway to make crypto mining more earth-friendly, and the New York-based company BlockFusion is leading the way.

“We made a conscious decision that we would not burn fossil fuels to generate virtual assets like Bitcoin,” CEO Alex Martini said. “It was very important for us to use clean energy.”

Thanks to Niagara Falls, that “clean energy” is abundant in upstate New York. The state is now responsible for about 20% of crypto mining done in the U.S.

“We thought it was indicative of where technology was going in the 21st century,” Martini said. “You don’t burn coal to generate virtual assets, but you can use clean power with zero carbon emission.”

However, now the concern is that these “green” crypto companies are using more than their fair share of the clean hydroelectric energy and not hiring many people locally.

Companies like BlockFusion are operating out of old coal plants. These old buildings used to support thousands of jobs in the community, but crypto mining doesn’t require nearly the same number of workers.

In response, local and state officials are trying to regulate the quickly expanding industry by passing new restrictions and guidelines. 

The city of Niagara Falls has a six-month moratorium on new businesses, and the state requires those companies be licensed. New York also just passed a new annual fee on crypto companies, which they’ll have to pay with cash or check — not digital currency.

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Justice Department Installs New FBI Crypto Crime Unit

The Federal Bureau of Investigation is launching a unit dedicated to tracking and seizing illicit cryptocurrencies as part of a broader shift in focus toward disruption of international criminal networks rather than just their prosecution.

Deputy Attorney General Lisa Monaco said Thursday that the new team, called the Virtual Asset Exploitation Unit, will centralize the law enforcement agency’s cryptocurrency expertise and provide blockchain analysis, virtual asset seizure and training to the rest of the FBI.

“This FBI unit will combine cryptocurrency experts into one nerve center,” said Ms. Monaco, speaking at the Munich Cyber Security Conference.

Cryptocurrency has emerged in recent years as the primary means by which cybercriminals reap the financial rewards from cyberattacks. A February report issued by blockchain analysis company Chainalysis Inc. estimates that around $11 billion in cryptocurrency holdings at the end of 2021 had illicit sources. Law enforcement agencies have zeroed in on disrupting the economics of cybercrime as a key prevention tool, by recovering funds paid in ransoms or stolen by hackers and identifying hackers through transactions.

The FBI’s Virtual Asset Exploitation Unit will work with the Justice Department’s National Cryptocurrency Enforcement Team, a group of about a dozen prosecutors that Ms. Monaco established in late 2021.

The DOJ announced earlier Thursday that Eun Young Choi, a career federal prosecutor, will serve as the NCET’s first director.

The Justice Department also announced an international virtual currency initiative, through which it will help law enforcement authorities in other countries improve their techniques and abilities in cryptocurrency investigations, Ms. Monaco said.

International law enforcement agencies have helped in previous cybercrime investigations, she added. “We can’t do this alone,” she said.

The DOJ is taking additional measures to step up its cybercrime work with international law enforcement authorities. U.S. prosecutors handling significant cybercrime investigations will now be required to consult with department experts to identify foreign partners that could help, Ms. Monaco said. A new Justice Department cyber operations liaison will be embedded in Europe and work with U.S. prosecutors and European officials to speed up cases against top cybercriminals, she added. “International cooperation will not be an afterthought,” Ms. Monaco said.

Tonya Ugoretz, deputy assistant director of the FBI’s cyber division, said that international cooperation has already borne fruit.

“We’ve had some notable successes, not only in infrastructure takedowns but also arresting and extraditing some of the criminals behind this activity, as well as some notable virtual currency seizures,” she said while speaking at the same conference as Ms. Monaco.

On Feb. 8 the Justice Department said it seized around $3.6 billion worth of cryptocurrency stolen during a 2016 hack of an exchange. The value of the cryptocurrency at the time made it the largest financial seizure in the Justice Department’s history. Ms. Monaco said this and other efforts involving cryptocurrency seizures should encourage companies to report incidents as early as possible.

“If you report to us, we can follow the money and not only help you but hopefully prevent the next victim,” she said.

Federal prosecutors and investigators will also start looking for ways to disrupt cybercrimes before they happen, instead of waiting to charge perpetrators afterward, Ms. Monaco said. Authorities could, for example, seize servers used to carry out attacks or issue decryptors to help victims whose data is encrypted during an attack, she said.

Ms. Monaco said the efforts to disrupt cyberattacks before they occur will require a cultural shift similar to the Justice Department’s counterterrorism work after the Sept. 11, 2001, terrorist attacks in the U.S. The Justice Department will consider “all available tools” to disrupt hacking crimes and reduce risks to victims, she said, including sanctions, export controls and efforts with international partners and the private sector.

“We should be looking for success both inside and outside the courtroom. My message to cybercriminals is equally clear: The long arm of the law can and now will stretch much farther into cyberspace than you think,” she said.

Write to James Rundle at james.rundle@wsj.com and Catherine Stupp at Catherine.Stupp@wsj.com

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